Forman Law Firm recently represented a Texas investor and received a Final Judgment confirming a Final Arbitration Award in the amount of $2,838,942.42 issued in favor of the investor. The Final Award and Judgment were against the primary corporate Respondent and against its control persons in connection with the sale of private securities to our Client in the amount of $1,620,000.00. The securities sold were interests in a Limited Liability Company (LLC) in connection with its efforts to raise capital. After hard-fought discovery battles and a one-week final hearing, the arbitrator decided that the securities offered and sold to our client were sold in violation of the Texas Securities Act’s anti-fraud provisions. The Texas Securities Act provides that it is a violation to offer or sell any security in Texas through the use of false or misleading statements of material facts. The Final Award included attorneys’ fees and costs in the amount of $846,209.46.
Lead counsel was Bryan Forman of the Forman Law Firm, P. C. and co-counsel were Hamp Skelton and Eddie Kaye of Skelton & Woody. “We believe the evidence demonstrated that these securities were sold through false and misleading statements, including statements touting non-existent strategic alliances and partnerships with nationally recognized companies, and that various statements made by the Sellers concealed the true financial condition of the company and how the investors’ money was to be spent by the Company,” stated Forman. Forman explained “The Texas Securities Act is a very powerful investor protection statute, permitting investors to recover upon proof of any false or misleading statement about a fact that should be important to the investor’s decision to invest. We don’t have to prove the Sellers intended to deceive or that the false or misleading statement caused any losses; if the Sellers tell an investor something that is materially false or mislead the investor by omitting material facts, the investor should recover all of their investment, plus 6% interest, all of the costs incurred in the case, and their attorneys’ fees if equitable under the circumstances.”
Mr. Skelton noted, “Our client is a sophisticated investment banker, but an investor’s sophistication doesn’t always protect him or her from false and misleading statements made in order to sell securities. Our client fought hard to prove his claims and for the principle that sellers of securities should be held accountable for what they say when asking someone to invest. He was vindicated for his fight.” Forman noted “the Respondents paid the full amount within three days of the final award, and the Court confirmed the arbitration award into a final judgment in favor of our client.”